How Does Germany Conduct International Business? - Paper Example

Introduction

The centrality of a country's physical, sociological, and political factors in determining its way of doing business is unquestioned. The factors dictate the business culture of the country and the information informs and investor decision making process. Moreover, contemporary technological advancement, market dynamics, globalization, and modernization have revolutionized international trade tremendously (Wiltenburg, 26) Different sectors pertinent to trading activities such as communication and transport have undergone monumental transformation thus making the exchange of good and services efficient and comfortable. In addition, different strategies and approaches developed from time to time such as the intervention of trade organization and unions have elevated the process a notch higher. However, different countries have a different way of doing business based on both internal and external business environment factors. International trade has immense challenges thus; numerous factors from the economy to the government to people to geography are factors to consider before embarking on international business. Therefore, this paper explores a critical discussion on how Germany conducts international business.Germany Background Information

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The country Germany was founded way back in the year 1871 following the three successful wars by the then German empire that led to the unification under governance (In Jampol et al., 28). By this time, the present day Germany was an agglomeration of numerous principalities, kingdoms, and Duchies. In 1945, the stronger power of United States, France, Soviet Union, France, and other countries defeated the empire and diving the country into four zones and later two countries namely East Germany (German Democratic Republic) and West Germany (Federal Republic of German). The German Empire (Second Reich) of the 19th Century led by Prime Minister Otto Von Bismarck was Europe's leading power and acquired colonies in Africa. The Weimar Republic perpetuated the declaration of Germany as a republic in 1918 hence marked the beginning of the German revolution. The Weimar regime realized fundamental developmental reforms both in the industrial revolution and most especially in education when the first schools for girls were recognized.

During imperial Germany, the able Prime Minister Otto von Bismarck realized remarkable efforts to improve industrialization that was immensely on the rise then. He organized deployed troops and established protectorates in different parts of Africa during the scramble and partition to acquire raw materials for the industries. The move contributed a great deal in boosting industrial revolution during the era of prominent inventors such as Gotlieb Daimler in the motor sector (Wiltenburg 36). Inferably, the relentless and persisted industrial revolution then has a critical bearing to the present day prosperous business in the nation of Germany. Since because of the industrialization, Germany is currently the leading exporter in machinery and motor vehicles.

Geography

Geography is a critical factor in determining a country's way of doing business. Various issue such as different clothing at what point in time is imperative not only to the foreigner's investors but also to the locals for survival and thriving in business. Germany is located in central Europe. The country is surrounded by nine neighboring countries: Belgium, Czech Republic, Austria, Netherlands, Poland, Switzerland, France, Denmark, and Luxembourg. As the largest countries in Europe the country, occupy a total size of 137,847 mi (357'021 sq. km) and an entire coastline of 1,484 mi (2,389 km). Globally Germany lies at the North Pole or the northern hemisphere hence the country generally has more prolonged periods of cold and hot weather, which is both temperate and maritime.

The northwestern part of the country, which is coastal mainly, and entire coastal Germany has a maritime climate majorly characterized with cold and cloudy winters as well as warm summer. The temperature of the region is generally cold and wet winters with snows mostly in Mountainous areas. The more significant part of the country lies in the cold temperate climatic zone, which is predominantly experiencing the humid westerly winds annually. Even though, winters in Germany are mild at times they become harsh with heavy snowfall with a temperature falling below zero especially in the southern and eastern parts.

German uses the Central European Time (CET) as the standard time zone and lies on UTC+1, whereas (CEST) Central European Summer Time is observed when DST, Day Light Saving time is forced in. According to various studies and research, the highest point in the country is Approximately 9,721 ft. (2,962 m) The major German rivers include the Elbe, the Danube, the Oder, the Weser, and the Rhine. River Rhine is navigable and hence use for transport of goods, it played a central role in the German industrial revolution ere. The northern parts of Germany are very cold and covered with glacier especially during the winter seasons, the German mountains such the Alps and Alpines are key attraction sites.

People and Society

Germany has a Population of 82 million, making it the most populated country in entire Europe and the most 16 populous in the world. Among the 82 plus millions of people, Christianity is the predominant religion with majority followers. Germans also called the Deutsche are people with the Germanic origin, and native to central Europe and they share the German language as their mother tongue for a substantial majority of ethnic Germans. Though also found in countries such as Austria, Switzerland, and Luxembourg they form 81% of the German population, whereas others such as Turkish, Other Europeans, Asians, Black Africans, and others form 4%, 7%, 2%, 1%, and 5% respectively.

Moreover, Germany is a faithful and cosmopolitan country. Therefore, different faithful across the world from Protestant 34 % to Jewish 0.1%, to Muslims 4%, to Roman Catholic 34%, all reside in the magnificent country. Moreover, the German constitution is religious sound and has a provision of freedom of worship and expression as a fundamental civil right to all the citizens. Since the Germanic ethnic cultures and groups mostly inhabit the country, the official language or the formal language is Standard German. The demographic information of Germany is always the case study of the population structure of a developed country. The population pyramid diagram is kite shaped and not pyramidal. As a result, the German's population growth rate: 0.22 with a Birth rate of 9.6 births/ 1000 population.

Germany has the majority of its population aging with just a small youthful population hence issues such as unemployment and literacy levels are no problems since they need to spend less on them. The above reason informs the unemployment rate that stands at 3.4% and literacy rank of 20 out of 215 countries, 99%. Among the state of Germany Baden-Wurttemberg is the riches, Bavaria (Bayern) largest and North Rhine-Westphalia most populated. Composed of 16 states, and Berlin became the official Germany capital state in 1991 (Wellbery, 32). Majority of the German population are middle-aged and aging population hence provide high labour intensive and market for international business and production. The reason explains why Germany is Centre of trade excellence in the world.

Government

Political will and stability is a key determent of a country's way of doing business. Just as the United States, Germany is a country formed by the emergence of states or many federal governments thus assumes the type of government called the Federal Parliamentary Republic (Federation). The country houses sixteen major federal governments or states that form the German government headed by a head of state or the president who is a democratic electoral system. The president is elected via voting for a maximum of two five-year terms in office. Notably, Germany has three arms of government, namely the Legislature, Judiciary, and Executive. In the judiciary, the Supreme Court is the highest court in the land the legal system upholds the German constitution as the supreme law of the land.

Additionally, the legal system upholds the German constitution as the supreme law of the land. The country got independence on 3 October 1990, Day of Unification. The country has a parliamentary democracy with two legislative bodies, the upper house (Bundesrat) and the lower House of Representatives (Bundestag) parliament is the beholder of legislative power. Elected members of the Bundestag represent a district, whereas a member of the Bundesrat is selected by the 16 state parliament (Bundesland). The country Conduct a democratic electoral system, regulated by the German Federal Election System (Schroll-Machel, 46).

The cabinets are chief and primary executive body of the federal republics. A counselor and the cabinet ministers constitute the cabinet, and the fundamental duty of the body is to administer federal states. The president proses the chancellor and elected by the federal parliament. Chancellor heads the executive and decides the scope of ministers' duties.

Economy

Germany's highly developed social economy is one of the leading economies in the world. Moreover, it is also the largest national economy in entire Europe ranked fourth largest by nominal GDP and fifth by GDP (PPP), (Service Sector 70%, Agriculture 0.9%, and Industry 29.1%). Following the historical record of tremendous technological advancement and the industrial revolution, Germany is rated the third largest exporter in the world (1.21 trillion euros), in 2016 registered highest trade surplus in the world ($ 310 billion). The wealthy nation not only produces a surplus in the industrial sector but also provides much more sophisticated and more innovative machines; this makes the county's economy attractive to the majority of inventors across the globe (Leao, 26).

Another chief contributor to the country's prosperity and development is pool of natural resources it beholds. Germany houses some of the valuable natural resources such as Timber, potash, lignite, salt, and natural gas. The natural resources also called the gift were the main perpetuated or the industrialization and hence the strong economy. Germany's inflation rate is very low and stands at 2.0 %. The low rate is a vivid indication that the country produces enough to meet the demand of its population and everything is available in the market at affordable prices. Frankfurt, one of the cities and states in Germany is the country's financial capital. The factors of the German economy from trade balance, to the natural resources to export portray a picture of a wealthy country and ripe for investment. The strong economy that German behold is an adequate favorable business environment for any aspiring inventor across the world

Germany and Trade Organizations

Germany has ratified to several trade agreements with different countries and trade organizations around the globe. Some of the Reputable trade organizations that Germany is a member include WTO (World Trade Organization), EU (European Union), and OECD (Organization for Economic Co-operation and Development). The trade organizations and unions have had a positive bearing in the country's both local and international trade. Through these unions and organizations, Germany has penetrated different markets across the world for their products. Some of the county's Main Export Partners include European Union, (58%), Switzerland (4.1 %), United States (8.8%), China (6.4 %) and Turkey (1.9%). On the other, Germany's main Import Partners: European Union, (57.6%), Russia (2.8%), China 9.9%), United States (6.2%), and Switzerland (4.7%)

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